Vail Valley: Village at Avon settlement includes 'sale fee'

<b>Dominique Taylor|dtaylor@vaildaily.com</b>Carlie Patterson, right, leaves Walmart with her son, Grant, 3, and a full load of groceries Wednesday at the Village at Avon in Avon. Development managers and town officials are putting the finishing touches on a settlement that will allow more builing at the 1,800-acre property. The settlement will also impose a new, .75 percent "sales fee" on purchases from those stores.

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AVON - Avon taxpayers have so far been paying the bills for the town's side of a legal dispute with the developers and managers of the Village at Avon project. But everyone who shops at stores there will soon start paying for part of the deal, too.

The town and the Traer Creek Metropolitan District, which manages the project and issued the bond debt to build it, are on the verge of finally settling a case that dates back to 2008. The settlement may be final in the next several weeks. Part of that settlement adds a .75 percent "fee" to the sales tax shoppers pay at existing and future stores in the project.

That "fee" - in essence, an increase in the sales tax - is a crucial part of the settlement, and will pay for the town's new obligation to provide municipal services like snowplowing, police services and landscape maintenance. The fee adds up to 75 cents on every $100 in sales.

The metro district, meanwhile, will continue to keep the existing town sales tax charged by stores in the development. That money goes to pay off the revenue bonds the district issued in the 1990s to pay for roads, utilities and an Interstate 70 interchange. That money will also be used to back bonds issued in the future that will pay for a new water storage tank and other improvements.

The original deal with the town - finalized in 1998 - called for the town to get a share of the sales tax collected at the Village at Avon, which would make up for revenue the town lost when Wal Mart moved from the center of town to its current location.

When the metro district stopped making those payments - citing a cash crunch because, it alleged, the town had stymied building on the property - the town filed suit to recover that money. The metro district then suit the town. That was in 2008.

After piling up millions in legal bills and mountains of paperwork, the town and metro district announced in October of 2011 that the parties had agreed to the basis of a settlement of the lawsuits.

Hammering out the large details of that settlement took more than a year, and lawyers are still working on the fine points. But, in essence, the settlement allows future development on the property and puts the town in charge of municipal services.

The sales fee hasn't been imposed yet. Traer Creek representative Michael Lindholm said that will happen when the settlement is finalized. The town will take on its new responsibilities at about the same time.

Lindholm said once more development takes place, the fee will be able to pay for more than just the services it's obligated to provide.

"The fee grows as the development grows," Lindholm said. "It's eventually two times what (the town) needs."

Lindholm said future development at the project will also allow the metro district to retire its revenue bonds more quickly - although that will still take decades.

Avon Town Council member Chris Evans said he's eager to have the settlement finished. Once that happens, though, the question becomes what might be built next.

"That's the $64,000 question," Evans said. "It's a win-win for the town and Traer Creek if development occurs, but it's in the control of the developer."

Still, he said the settlement is essential to building anything new on the property.